Millions of consumer make monthly payments to utilities, merchants, banks, and other service providers ("billers") by check, with a small number of consumers using electronic banking services. The term "consumer" as used herein broadly refers to any person or entity paying a bill, be it a utility customer, a taxpayer paying a tax, a borrower repaying a loan, a state or government paying a bill, a person receiving a statement of account from a bank, brokerage firm, etc.
Billers, who often are billing small amounts with each transaction, incur the costs of processing many checks and the attendant overhead of dealing with paper remittance coupons and envelopes. Given the economy of scale, a biller has great incentive to reduce the cost of remittance processing, and an even larger incentive to reduce the cost of "exception items." An exception item is a payment that, for some reason, cannot be processed according to the highly automated procedures put in place by the biller to quickly process the remittances. Exception items include checks received without payment coupons, payment coupons received without checks, checks for amounts different than the amount shown on the coupon, multiple payments received in an envelope with a single check, etc. Whereas the cost to a biller to process a properly submitted remittance may be $0.10 per item, an exception item transaction might cost as much as $0.65 to $1.50. Billers, therefore, have a large incentive to minimize the number of exception items.
Various prior art electronic bill payment services exist (including electronic banking, bill payment service bureaus, banks, etc.), but generally increase the cost per item to the biller as well. These prior art electronic bill payment services include services offered by Bank of America, Wells Fargo, CheckFree, and through software products such as MS Money and Quicken. Unfortunately, when a consumer decides to try an alternate form of remittance using these electronic bill payment services the cost to the biller increases dramatically because such a remittance is typically an exception item to most billers today. A bill payment service provider offers a bill payment services to consumers whereby the consumer directs the service provider to make payments to the biller. Since the payment origination is usually done electronically, the remittance is not presented to the biller in the usual way with a check and a payment coupon in the biller provided envelope. Instead, the biller usually receives a check printed by the service bureau showing the consumer's account number and other data. In some cases, the biller is presented with a check along with instructions to credit the amount of the check to the consumer's account. In other cases, the payment is an electronic transfer where the consumer's account information is included in a list of payments from multiple consumers.
In any case, these transactions are exception items to the biller since no payment coupon is presented, thus entailing additional costs to billers. Furthermore, large bill payment service bureaus may have many consumers using their service and paying bills to the same biller. Unfortunately, that biller will often receive one check for many customers accompanied by a list of account numbers and amounts for consumers whose remittances are part of the single check. The biller must then go through the list manually to verify the account numbers are correct, and then capture the data to its accounting system. Furthermore, a biller with thousands of customers may have to deal with a large number of electronic bill payment services (that is, many service bureaus or banks) directly. The logistics of dealing with many different electronic bill payment services and keeping track of consumers, their account numbers, and with which electronic bill payment service they are associated, increases the cost of processing remittances by the biller.
One technique for addressing the above inefficiencies in bill payment is shown in FIG. 1. FIG. 1 illustrates an electronic bill payment environment 10. Environment 10 allows a consumer 12 to easily pay a bill via electronic means to any of a number of billers 14. Operating regulations 16, contractual arrangements, or rules, govern the actions of the parties within the overall environment, and an electronic payment system 18 performs the actual transfer of an electronic bill from a consumer financial institution 20 to a biller financial institution 22. Once consumer 12 receives a bill in the mail, the consumer interacts with financial institution 20 to direct that the bill payment be sent to biller 14. Electronic payment system 18 manages the transfer of the electronic payment from consumer financial institution 20 to biller financial institution 22. Electronic payment system 18 may take a variety of forms for transferring electronic payments. By way of example, a suitable electronic bill payment system 18 is disclosed in U.S. Pat. No. 5,465,206 entitled "Electronic Bill Pay System", commonly owned by the assignee of the present application, which issued on Nov. 7, 1995 to Hilt, et al. This patent is hereby incorporated by reference in its entirety. Although an electronic bill payment environment 10 including an electronic payment system 18 may be implemented in a variety of ways and managed by any entity, FIG. 1 provides an example of such an environment 10 that is coordinated by Visa International Service Association (hereinafter "VISA") of San Mateo, Calif. In one specific embodiment, electronic bill payment system 18 is the Visa ePay system.
Electronic payment system 18 includes technical platform 24 (hardware and software for implementation), biller reference file 26 (such as a universal biller file, or UBF, of U.S. Pat. No. 5,465,206), and service infrastructure 28. In the Visa ePay system embodiment, a global clearing and settlement system termed VisaNet is used to assist in administration of electronic payment environment 10. Through use of electronic payment environment 10, consumer 12 is able to quickly and easily send payment and accounts receivable information 30 to biller 14 in a manner that reduces the costs associated with handling these payments to biller 14.
Such an electronic payment system 18 provides a variety of advantages. It is an interbank system that facilitates information exchange between banks and adds value to that exchange. It allows a financial institution on either end to maintain relationships with consumers and/or billers and to provide branded services to those consumers and/or billers. That is, the internal operation of electronic payment system 18 and the presence of its coordinating entity are invisible to consumers and billers. It allows a biller to deal with a single financial institution and minimizes exception items because the electronic bill payments come with consumer authorized payment instructions that are not viewed as exception items. Such an electronic payment system has advantages for financial institutions as well such as supporting electronic payment initiatives, providing standards and operating regulations, providing robust and error-free electronic data, and increasing value to the financial institution's customers.
However, even though a biller is provided with an electronic means to receive payments from consumers, there still exists the problem of delivering statements and invoices efficiently to consumers. It is important for a biller to deliver an invoice to a consumer so that the consumer may then pay the bill presented in the invoice. An invoice is typically a bill presented to a consumer for services rendered or service units accumulated. A statement might be delivered to a consumer to update the account status for that consumer, and includes bank accounts, brokerage accounts, etc. The term "statement" will be used broadly herein to denote not only invoices and statements of any form, but other information product that a biller, merchant or other entity desires to deliver to a consumer to update the consumer as to the relationship between biller and consumer.
Currently, invoices in particular are received by consumers through the mail. The cost to a biller in preparing and mailing an invoice to a consumer is a large per unit cost. These costs include the paper for the invoice, any enclosures, the envelope, postage, printing, data management, etc. Similarly, the costs associated with preparing and mailing any type of statement to a consumer can also be quite high. Billers have a large incentive to try to reduce this high cost of mailing statements and invoices. Furthermore, receipt of a paper invoice in the mail does not necessarily encourage a consumer to reply using an electronic bill payment system such as described above. Billers would prefer that a consumer use an electronic bill payment system to pay an invoice to save the biller money.
Other alternative techniques exist for providing invoices to consumers, but suffer from drawbacks. For example, CheckFree provides a service by which a consumer receives an electronic invoice from CheckFree over the Internet. Using the Internet, the consumer must log into the CheckFree Internet site in order to access the consumer's invoice and direct that it be paid. However, this technique requires that CheckFree establish a relationship with each biller that it supports, and also with all of the consumers for that biller. From the biller's perspective, this is not an extremely desirable situation. For one, it is unlikely that every single one of the biller's customers will sign up with CheckFree. Unfortunately, the biller must establish and maintain a relationship with each of these electronic invoice services. Thus, the invoices that a biller sends out must be sent to a variety of independent services for later distribution to the biller's customers. Such a spread out relationship among service providers is difficult and costly for a biller to maintain. Also, as each service may be a separate, independent company, there are no overarching operating regulations to bind all of the parties and to ensure that the biller will receive consistent, quality services. In addition, current electronic invoice services (such as CheckFree) do not allow generation of EDI 810 electronic invoices as required by such organizations as the U.S. Government's General Services Administration (GSA).
Therefore, the above shortcomings of current statement and invoice delivery approaches demonstrate that an improved means of delivering statements and invoices to consumers is needed. Such an improved delivery means would leverage existing systems (such as existing electronic payment bill systems and clearing and settlement systems), and would provide standards and regulations to ensure consistent and quality service.